DCS Not Allowed to Restructure Bond Debt

On May 26, 2017, Texas Attorney General Ken Paxton told Dallas County Schools it will not be allowed to restructure its bond debt. Without that restructuring deal DCS could default on its debt payments by June 1, 2017.

(Published Friday, May 26, 2017)

"Obviously this is a serious situation and there are more questions than answers. We are working hard to pay our obligations and do everything we can to protect the assets for taxpayers and employees while continuing services for school districts. There are lots of moving parts to this and we will know more by the end of the week."

It appears DCS has so far been unable to come up with the cash it needs to make more than $10 million in debt service payments due June 1.

DCS has more than $130 million in outstanding debt and has lost millions of dollars on a school bus camera venture the agency launched using public money.

Friday, the Texas Attorney General's Office rejected a restructuring plan that could have averted the current cash flow crunch.

The attorney general's office said it had concerns about DCS' debt load and its ability to meet financial obligations. The denial also cited uncertainty surrounding a bill that recently passed the Texas legislature that would shut down the agency unless a majority of voters elected to keep it running.

Mullins, Thursday, accused lawmakers of contributing to the current financial crunch.

"These events should make it clear to lawmakers that this bill was hastily prepared and pushed through without consideration for the children. After all, summer school starts next week," Mullins said in a statement.